Employee loyalty is on the rise, but U.S. companies must do a better job creating an environment to help keep more committed workers and therefore maintain customer relationships, according to a report released today. "The Walker Loyalty Report for Loyalty in the Workplace" outlines key factors contributing to employee loyalty. It reveals limited loyalty in the U.S. workplace, with only 34 percent of employees categorized as being "truly loyal," defined as being committed to the organization and planning to stay with their companies for at least two years.
Although this represents an upward swing of four percentage points from the last time the survey was conducted in 2003, and 10 percentage pints from 2001, 59 percent of the workforce are still considered "trapped" (28 percent) or "high risk" (31 percent). Trapped employees are those who don't want to be there, but plan to stay and often portray a negative attitude toward the company. High-risk workers don't have the commitment and don't plan to stay. The remaining 6 percent is considered "accessible," meaning those people want to remain, and have a positive attitude toward the company, but may leave for personal reasons.
"Real opportunities exist for companies to close the gap between those employees who are merely satisfied (75 percent) and those who are truly loyal," says Chris Woolard, client services consultant and employee loyalty specialist for Walker Information. They can offer training and development, and exhibit a strong focus on employees. Only 40 percent of respondents said their companies view employees as the most important asset, 55 percent said their companies treat employees well, and 55 percent stated having received ample training and development opportunities. Over the past year truly loyal employees have participated in 360 feedback, career planning, training classes, and mentor programs. The number one driver is promotions.
Why should companies care about how loyal their employees are? Keeping employees around for even an extra six months can save costs, according to Woolard. Replacing someone usually costs about 1.5 times that person's salary when taking into account advertising, drug screenings, and downtime. The more loyal employees recommend their company as a good place to work, limit their job searching, resist offers from other companies, and do things above and beyond the call of duty--also contributing to customer satisfaction.

What's more, potential customer concerns come into play with new employees who don't have the same rapport with customers. "Customers want to know that whoever takes care of [them] will be the person who will give them the best experience," says Michael DeSanto, vice president of marketing communications for Walker Information "Even as much information as CRM systems hold, there's a human element that can't be replaced when that employee leaves. There's a tangible that goes with that."
Frontline employees are mostly junior-level workers who come and go faster than others, but it's important to make them feel they have a relationship with the company so their customers can feel the same way. "Human interaction points are key. They provide the real differentiator," Woolard says. All companies are focused on financial performance, but most focus more on customer satisfaction than employee satisfaction, DeSanto says. "Others get the big picture of how employees, partners, and customers all fit into that equation. Companies have to have the vision, insight, and audacity to measure employee loyalty," he says. "Often, they don't want to see the numbers. It's bold to say, 'We have a problem.' Customer turnover is far more risky, so they invest in it. What they're not seeing is the effect the employee turnover will have on customer loyalty."
Related articles:HR Execs Fear Not Attracting 'A' PlayersCustomer Loyalty: The Real PayoffWhat Price Loyalty?